Publisher's Note: Shhh, talking is bad
By Jody Reese
The New Hampshire Advantage Coalition is criticizing state house and senate leaders for planning a summit on taxation that will include discussion of a state income tax.
The crux of the advantage folks’ opposition seems to be that talking about an income tax will lead to more taxation. But what are the advantage folks trying to protect? Currently the system relies on hidden fees, one-time revenues and some of the highest property taxes in the country to pay for government. Frankly our current system is awful. It hides the true cost of government and burdens those who have the hardest time paying for it. That doesn’t seem like an advantage.
Apparently at some point an income tax became liberal and property taxes became conservative? I had always imagined that conservatives stood for restrained spending and that the issue of how state monies were raised was more an issue of fairness.
What could be more unfair than property tax? It’s not a flat tax. It’s not even a consumption tax. It’s a tax on a perceived value designated by a government employee. Gee, that seems like a great system conservatives should protect. It’s such a great system that if you’re a retired couple earning $25,000 a year from social security you might have a state/local tax rate of 20 percent based on a property tax bill of $5,000 while someone earning $200,000 a year living next door would have a tax rate of around 2 percent.
If we applied that taxing system to the federal government’s needs, based on the 2009 George Bush budget of $3.1 trillion, each average American home-owner would be responsible for $35,400. That wouldn’t be a bad deal for a couple earning $200,000 or more, but it would tough on that retired couple bringing in $25,000 in social security payments a year. Even if all government spending was sliced in half, that retired couple would still be paying almost all of their income in taxes.
Taxing solely based on the property you own isn’t fair or even practical. Taxation had always been based on people’s ability to pay. When we were a nation of farmers, taxing property was like taxing income because property produced income and was measurable. Keeping track of people’s income was impossible back then.
Today, we can easily track income and property generally doesn’t produce income — just expense — so why are we still clinging to that unfair form of taxation?
In fact, I’m surprised conservatives oppose an income tax — or even the discussion of one. Property taxes and fees tend to obscure how much taxes we all pay. If you’re a renter you pay property taxes, but indirectly. If every person paid taxes directly, wouldn’t they be more focused on how much they paid and what it was used for?
To me an income tax fits a more fair system of taxation: It’s open and everyone pays the same rate.
And, of course, to be really fair it would have to replace, not augment, property taxes.
Surely, we can talk more about this without some out there yelling about death panels.